Portable technology takes banking agents to rural India

State Bank correspondents Rashan and Nashir Penkar and their daughter, Icra

Time was, banks employed armies of human tellers. Later, they replaced many of them with automated teller machines. Now, India is using a hybrid of the two — the human A.T.M. — to expand banking to its vast rural population.

Swati Yashwant, a 29-year-old mother of one, is part of a growing legion of roving tellers intent on providing bank accounts to the nearly 50 percent of India’s 300 million households that do not have them. Using a laptop computer, wireless modem and fingerprint scanner, Ms. Yashwant opens accounts, takes deposits and processes money transfers for farmers and migrant workers in this small town 70 miles south of Mumbai, India’s financial capital.

To reduce the risk of robbery or theft, no transaction by law may exceed 10,000 rupees (about $212). And in practice, many amount to no more than a dollar or two. But with the bulk of India’s population living in villages that have never had a bank branch, Ms. Yashwant, with her electronic devices, is a missionary of financial modernity.

Many Indians “don’t know anything about banking,” she said in her small office here, which is decorated with a garlanded picture of Ganesh, the Hindu god believed to remove obstacles. “I want to open their accounts and help them understand banking.”

Economists and policy makers say mobile agents like Ms. Yashwant — who also are employed in countries like Brazil, Mexico and Kenya — represent one of the most promising ways to help the rural poor save and protect their money. Many people in India who do not have bank accounts, for instance, buy gold necklaces or simply keep cash in their unlocked homes…

The banking agents enable the poor to easily save money they otherwise might be tempted to spend, Mr. Banerjee said. And when times are lean, people could withdraw money they had saved, instead of borrowing cash at high rates of interest…

For India’s banks, it is a relatively inexpensive way to recruit customers. While about 70 percent of India’s population is dispersed among more than 600,000 villages, the entire country has only 33,500 bank branches. Correspondents like Ms. Yashwant have set up 74 million bank accounts in India.

“Frugal innovation” — magic words from the Indian subcontinent across Southeast Asia to China for decades. From home-made irrigation systems powered by people – to freight companies that start with bicycles and scooters – technology that is cheap and “good enough” has been a success at modernizing economies.

Later on, when folks are making the money required for tech and infrastructure advancements, no doubt they will be incorporated within and on top of this generation of minimalist technology.